The cost of borrowing is likely getting cheaper — and that’s bad news for savers.
The Federal Reserve is widely expected to cut its benchmark interest rate by another 25 basis points on Wednesday, with markets pricing in one more cut by early 2026, according to the CME FedWatch Tool, which tracks market expectations for Fed moves.
While that will lower borrowing costs for credit cards and loans, it also means yields on savings accounts, certificates of deposit and Treasurys are likely headed lower, too.
The Fed’s benchmark — known as the federal funds rate — influences how much interest you can earn on these accounts. Those yields generally move with the federal funds rate and are hovering around its current range of 4.25% to 4.5%.
“If the Fed cuts rates, high-yield savings accounts will adjust almost immediately, so the best way to lock in current yields is with fixed-rate CDs or individual Treasurys,” says Alex Caswell, a certified financial planner at Wealth Script Advisors.
